Guest Post: Nigeria: Cleaning Up Procurement

Ngozi Okonjo-Iweala, managing director of the World Bank and former Nigerian finance minister, Nigeria's Central Bank Governor Lamido Sanusi (C) and Vice President Goodluck Jonathan (R) exchange greetings during a session at the 15th edition of the Nigerian economic summit in Abuja December 15, 2009. (Afolabi Sotunde/Courtesy Reuters)

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This is a guest post by Jim Sanders, a career, now retired, West Africa watcher for various federal agencies. The views expressed below are his personal views and do not reflect those of his former employers.

Reportedly, Nigeria’s President Goodluck Jonathan has invited World Bank officials to vet all federal government contracts. “Very soon we will get people from the World Bank to be at my office. For every contract we want to award, irrespective of the structures we have on the ground, they will assess it so that if a job is supposed to cost N10,000 and it’s awarded for N10,000, the likelihood that the contractor bribing anybody will be reduced,” Jonathan was quoted as saying.

World Bank Senior Communications Specialist Obadiah Tohomdet has said, however, that Nigeria has not formally contacted the World Bank over the vetting of procurement contracts. Tohomdet termed the scheme “an idea in the making by the President.”

Critics argue that setting up a World Bank contract review desk in the president’s office is “a vote of no confidence in the government.” They point to Jonathan’s failure to inaugurate the National Council on Public Procurement, as authorized by the Public Procurement Act of 2007, and his use of the Federal Executive Council to approve contracts. Osita Okechuckwu of the Conference for Nigerian Political Parties (CNPP) stated that Nigerians “don’t need any foreign body to do the work we can successfully do.” Zakari Mohammed, speaking for the House of Representatives, noted that the World Bank experts may be paid in hard currency, which would be “another burden on government.”

Jonathan’s initiative is, in some ways, reminiscent of Liberian president Samuel Doe’s use of American financial experts in 1988-89 to help manage Liberia’s finances. The Opex (Operational Experts) project (pdf) consisted of seventeen experts who were given control over accounts in Liberia’s Ministry of Finance and the National Bank of Liberia. Their mission focused on improving revenue collection, expenditure control, and information processing systems.

The project experienced some success in bringing civil service, military, and pension salaries up to date and increasing revenue. However, after a year, the U.S. and Liberian governments mutually agreed to terminate Opex. Controls were circumvented and policy reform measures were not implemented. President Doe’s lack of commitment to the project proved especially damaging. Doe and his advisers retained control of some public funds outside the Ministry of Finance and would not give Opex access to them, as the funds formed the basis for patronage, power, and wealth.

Jonathan’s proposal appears to limit the World Bank experts’ role to an advisory one, rather than granting them control, yet a domestic backlash may be brewing among Nigerians who view the initiative as impinging on the country’s capabilities and sovereignty.

Removing corruption from procurement contracts also carries the potential to damage officials’ ability to dispense patronage, and is likely to be resisted as much in Nigeria today, as it was in Liberia in the late 1980s. Political systems in which patronage is deeply rooted are difficult to reform in part because of both ‘top-down’ and ‘bottom-up’ pressures, according to University of Oxford (Jesus College) Professor Nicholas Cheeseman.

Successful politicians’ ability to push reform is limited by their indebtedness to those who have supported them, while at lower levels, people worry that if they stop acting on a patron-client basis, while everyone else continues to do so, they will lose out. “To my mind,” Cheeseman argues, “it is precisely the combination of pressure from above and below [that] is what ensures that patron-client relations are so durable.” While Jonathan’s proposal–reportedly still ideational–to reduce corruption in procurement contracts is commendable, it is likely to be governed by patronage networks’ ‘invisible hand.’

Let’s give it a chance. Although I am not happy with the presence of World Bank officials in the highest levels of government, as a business consultant with some exposure to the procurement process in Nigeria this might be a necessary move.

While I admit that this will not destroy the powerful patronage network, it might limit its effectiveness and that is a good thing. I can see Okonjo-Iweala’s hands all over this.

We should not underestimate Jonathan. James Ibori is likely to go to prison in Britain and James Ibori is one man that underestimated Jonathan. Atiku and Babangida also underestimated Jonathan during the last PDP primaries.

In other news, the Federal Government is reported to plan to let go of 28,000 workers next year.

Posted by MadukaFebruary 29, 2012 at 4:36 pm

The “level of indebtedness to those who have supported them” shouldn’t be overestimated. Nigerian politics is littered with the carcasses of “godfathers” who fell out with their “godsons”. (e.g. Uba/Ngige, Nwobodo/Nnamani, Nnamani/Chime, Obasanjo/Daniel etc).

If Jonathan has decided in his mind to be a one-term president, he will not be as beholden to patronage networks as Obasanjo was.

What exactly are the risks to Jonathan if he decides to clean up the public procurement system? Could he be impeached? Unlikely, too politically risky. Could he be denied a second term? This assumes that he desires a second term, but what if he doesn’t?

Posted by Vincent GwarazimbaMarch 1, 2012 at 8:07 am

This is the best way to save Africa. All African countries should have advisory body within the presidency. That will save public money from corrupt and inept officials.

Posted by Michael IjereMarch 3, 2012 at 6:18 pm

Jonathan , by sincerity , less focus on sectionalism and adherence to competence in individuals and processes, is doing right most of what his predecessors did wrong.. Quite simply , the man in the black hat could be well on the way to saving the worlds largest black nation.

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